AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 18/10/2026
Moat50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 2/4 · Specified products and operational integration identify plausible barriers, supported by packaging adoption and OEM share gains. The extent of technological superiority and replacement friction remains unquantified.
durability · 2/4 · Packaging growth over a two-year comparison supports persistence beyond a single quarter. The passages lack evidence of enduring exclusion, protected technology lifetimes or long-term customer lock-in.
customer dependency · 2/4 · Integration into OEM operations and strong aerospace backlog suggest customer reliance indirectly. They do not establish exclusivity, replacement costs or immunity to supplier changes.
erosion resilience · 2/4 · Selected share gains and meaningful inflation recovery demonstrate resilience, while refinish weakness and lower Performance Coatings income show its limits. General competition disclosures are risks rather than evidence of realized share loss.
Pricing power56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 3/4 · Selling prices increased 1% in 2025 and 2% in second-quarter 2026, with the latter offsetting approximately 90% of cost-of-goods inflation. This demonstrates meaningful pricing capability despite indexed price reductions in OEM coatings.
retention · 2/4 · Packaging adoption, OEM share gains and aerospace backlog support continuing demand indirectly. Lower refinish volumes and EMEA volume declines alongside higher prices prevent a stronger conclusion; no causal attribution of those declines to pricing is established.
margin resilience · 2/4 · Architectural pricing and cost controls helped increase income despite inflation. Performance Coatings income declined because higher prices did not overcome volume weakness and inflation, and companywide price recovery remained incomplete.
contractual freedom · 2/4 · Implemented price adjustments across businesses demonstrate some practical repricing ability. Indexed automotive OEM selling prices establish contractual constraints; contract duration, reset timing and termination rights are unavailable.
Predictability92
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 75.00
- Revenue growth volatility (pp)
- 7.16
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 2.64
Financial strength53
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 15.89
- netDebtEbitGrade
- 48.85
- interestCoverageGrade
- 77.14
- currentRatioGrade
- 69.94
- Debt / FCF (x)
- 6.89
- Net debt / operating income (x)
- 2.56
- Current ratio (x)
- 1.62
Capital allocation92
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 18.26
- 3-year average dilution (%)
- -1.39
- 3-year average SBC / revenue (%)
- 0.29
- cashConversionGrade
- 93.99
Management63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · 2025 operating cash flow of $1.9 billion supported $778 million of capital expenditures and $1.4 billion of shareholder distributions, exceeding that year's operating cash generation in combination. First-half 2026 cash flow improved and debt repayments exceeded issuance, but investment and distributions reduced cash. These are mixed allocation outcomes without demonstrated returns on major investments.
incentive alignment · 3/4 · Actual equity grants and three-year EPS and cash-flow-return conditions establish performance-linked incentives. Missed 2025 targets led to annual payouts of 59%–93% of target, demonstrating consequences rather than merely a proposed structure. An adopted recovery policy adds protection; ownership alignment and long-term vesting outcomes remain unknown.
execution · 2/4 · Share gains, aerospace output improvement and higher cash generation demonstrate execution through indirect operating evidence. Adjusted EPS declined 4% in 2025, growth and EPS targets were missed, and first-half 2026 Performance Coatings income declined, producing a mixed assessment.
governance · 3/4 · Disclosed practices include 11 of 12 independent directors, independent committees, annual elections, majority voting, one vote per share, proxy access and special-meeting rights. The combined chair/CEO role limits separation of authority despite an independent lead director. These support strong governance architecture without proving exceptional oversight outcomes.
Evidence
PPG’s business is comprised of three reportable business segments: •Global Architectural Coatings: Leverages leading trusted brands and its world-class distribution networks to provide sustainable do-it-yourself (DIY), trade and retail high-performance solutions to customers across key geographies •Performance Coatings: Delivers highly-specified, differentiated products and services that enhance customer productivity, focused on aftermarket and select original equipment manufacturers to maximize profitable growth •Industrial Coatings: Provides direct-to-factory technology-advantaged solutions integrated into original equipment manufacturer customers’ operations that support their global expansion, sustainability and productivity goals.
Item 1, Business: segment descriptions · Filed 19/02/2026
The coatings industry is highly competitive and consists of several large firms with global presence and many firms supplying local or regional markets.
Item 1, Business: industry competition · Filed 19/02/2026
32 Table of Contents Packaging coatings organic sales increased by a double-digit percentage versus the prior year period and sales volumes are up over 20% on a two-year stacked basis, driven by share gains as customers adopt our leading technologies.
MD&A, Industrial Coatings: packaging adoption and two-year volume growth · Filed 29/07/2026
Increased sales volumes were driven by share gains in both protective and marine, reflecting demand for PPG's sustainably-advantaged products.
MD&A, Performance Coatings: protective and marine share gains · Filed 29/07/2026
2025 Net sales $1,778 $1,665 $113 6.8 % $3,409 $3,227 $182 5.6 % Segment income $229 $227 $2 0.9 % $422 $442 ($20) (4.5) % Depreciation and amortization expense $53 $49 $4 8.2 % $104 $96 $8 8.3 % Segment EBITDA $282 $276 $6 2.2 % $526 $538 ($12) (2.2) % Three Months Ended June 30, 2026 Industrial Coatings segment net sales increased due to the following: ● Higher sales volumes (+5%) ● Favorable foreign currency translation (+2%) Automotive OEM coatings organic sales increased a low single-digit percentage, with mid-single-digit percentage sales volume growth, including share gains, outpacing the decline in global automotive industry production by about 500 basis points.
MD&A, Industrial Coatings: quarterly results and automotive OEM share gains · Filed 29/07/2026
Demand is robust, and customer order backlogs remained strong even with improved manufacturing output stemming from growth-related debottlenecking investments.
MD&A, Performance Coatings: aerospace backlog and manufacturing output · Filed 29/07/2026
The company has proactively made price adjustments globally and across all our businesses, resulting in a 2% selling price improvement in the second quarter.
MD&A, Middle East Conflict and Price Increases: realized second-quarter pricing · Filed 29/07/2026
In the second quarter, this selling price improvement offset approximately 90% of the cost of goods sold inflation, and we currently anticipate that 100% of cost of goods sold inflation will be offset by higher selling prices and productivity initiatives by the fourth quarter.
MD&A, Middle East Conflict and Price Increases: actual inflation recovery and fourth-quarter expectation · Filed 29/07/2026
Six Months Ended June 30, 2026 Industrial Coatings segment net sales increased due to the following: ● Higher sales volumes (+3%) ● Favorable foreign currency translation (+3%) Organic sales for automotive OEM coatings increased by a low single-digit percentage compared to the prior year driven by higher sales volumes partially offset by lower indexed-based selling prices.
MD&A, Industrial Coatings: first-half volumes and indexed selling prices · Filed 29/07/2026
Segment income was $617 million, a decrease of 2% versus the prior year, as higher selling prices were more than offset by lower automotive refinish coatings sales volumes and cost of goods sold inflation.
MD&A, Performance Coatings: first-half income decline and its drivers · Filed 29/07/2026
31 Table of Contents Six Months Ended June 30, 2026 Performance Coatings net sales increased due to the following: ● Higher selling prices (+3%) ● Acquisitions (+2%) ● Favorable foreign currency translation (+2%) Partially offset by: ● Lower sales volumes (-1%) Automotive refinish coatings organic sales decreased by a double-digit percentage versus the prior year.
MD&A, Performance Coatings: first-half pricing, volumes and refinish sales · Filed 29/07/2026
30 Table of Contents Six Months Ended June 30, 2026 Global Architectural Coatings net sales increased due to the following: ● Favorable foreign currency translation (+9%) ● Higher selling prices (+2%) Partially offset by: ● Divestiture-related sales (-1%) Architectural coatings – EMEA organic sales were flat compared to the prior year with higher selling prices offset by lower sales volumes.
MD&A, Global Architectural Coatings: first-half pricing and EMEA volume offset · Filed 29/07/2026
The increase was driven by higher selling prices, favorable foreign currency translation and cost-control actions partially offset by cost of goods sold inflation.
MD&A, Global Architectural Coatings: income improvement drivers · Filed 29/07/2026
Selling prices increased 1% as targeted price increases were partially offset by lower index-based pricing.
Executive compensation discussion: realized 2025 selling prices · Filed 05/03/2026
For 2025, the Company had operating cash flow of $1.9 billion, up $500 million year over year, and returned $1.4 billion to shareholders in the form of dividends and share repurchases.
Executive compensation discussion: 2025 operating cash flow and shareholder distributions · Filed 05/03/2026
2024 Capital expenditures (1) $778 $721 7.9% Business acquisitions, net of cash balances acquired $1 $31 (96.8)% Total capital expenditures, including acquisitions $779 $752 3.6% Capital expenditures, excluding acquisitions, as a % of sales 4.9 % 4.6 % 0.3% (1)Includes modernization and productivity improvements, expansion of existing businesses and environmental control projects.
MD&A, Capital expenditures: actual 2025 investment · Filed 19/02/2026
AND SUBSIDIARIES Condensed Consolidated Statement of Cash Flows (Unaudited) Six Months Ended June 30 ($ in millions) 2026 2025 Operating activities: Net income attributable to controlling and noncontrolling interests $825 $836 Less: Loss from discontinued operations (2) (2) Income from continuing operations $827 $838 Adjustments to reconcile net income to cash from operations: Depreciation and amortization 266 256 Stock-based compensation expense 27 36 Deferred income taxes (33) (22) Cash used for restructuring actions (28) (45) Change in certain asset and liability accounts (net of acquisitions): Receivables (623) (745) Inventories (189) (256) Other current assets (112) 3 Accounts payable and accrued liabilities 481 300 Taxes and interest payable 35 (94) Noncurrent assets and liabilities, net (56) (22) Other (1) 122 Cash from operating activities - continuing operations $594 $371 Cash used for operating activities - discontinued operations (2) (2) Cash from operating activities $592 $369 Investing activities: Capital expenditures ($309) ($330) Business acquisitions, net of cash balances acquired (145) — Other (4) 42 Cash used for investing activities ($458) ($288) Financing activities: Proceeds from the issuance of debt, net of discounts and fees $403 $940 Proceeds from Term Loan, net of fees — 309 Repayment of long-term debt (700) (341) Purchase of treasury stock (175) (540) Dividends paid on PPG common stock (317) (308) Other 11 (23) Cash (used for)/from financing activities ($778) $37 Effect of currency exchange rate changes on cash and cash equivalents 1 173 Net (decrease)/increase in cash and cash equivalents ($643) $291 Cash and cash equivalents, beginning of period 2,163 1,270 Cash and cash equivalents, end of period $1,520 $1,561 Supplemental disclosures of cash flow information: Interest paid, net of amount capitalized $167 $117 Taxes paid, net of refunds $230 $230 Supplemental disclosure of noncash investing activities: Capital expenditures accrued within Accounts payable and accrued liabilities at period-end $59 $67 Purchases of treasury stock transacted but not yet settled $4 $4 The accompanying notes to the condensed consolidated financial statements are an integral part of this condensed consolidated statement.
Condensed Consolidated Statement of Cash Flows: first-half 2026 · Filed 29/07/2026
Full-year 2025 EPS was $6.92 and adjusted EPS was $7.58 which declined 4% year over year.
Executive compensation discussion: 2025 reported and adjusted EPS · Filed 05/03/2026
We achieved our adjusted cash flow from operating activities target, but we fell short of our adjusted earnings per diluted share from continuing operations target and our organic sales growth targets.
Executive compensation discussion: achieved and missed 2025 targets · Filed 05/03/2026
As a result, annual incentive awards paid to executive officers ranged from 59% to 93% of target.
Executive compensation discussion: actual annual incentive payouts · Filed 05/03/2026
Three Months Ended June 30 Six Months Ended June 30 ($ in millions) 2026 2025 2026 2025 Stock-based compensation expense $16 $13 $27 $36 Income tax benefit recognized $3 $3 $5 $8 17 Table of Contents Grants of stock-based compensation during the six months ended June 30, 2026 and 2025 were as follows: Six Months Ended June 30 2026 2025 Shares Fair Value Shares Fair Value Stock options 278,903 $32.75 542,263 $32.93 Restricted stock units 402,119 $117.05 275,472 $111.55 Market stock units 118,989 $112.76 — $— Contingent shares (a) 55,195 $125.55 76,925 $114.39 (a)The number of contingent shares represents the target value of the award.
Stock-based compensation note: actual first-half equity grants · Filed 29/07/2026
Beginning with 2026 grants, the amount paid upon vesting of performance-based RSUs may range from 0% to 200% of the original grant based upon the level of adjusted earnings per share growth and level of cash flow return on capital growth achieved over the three calendar year periods comprising the vesting period.
Stock-based compensation note: performance conditions beginning with 2026 grants · Filed 29/07/2026
Skills 30 investor.ppg.com Table of Contents CORPORATE GOVERNANCE Our Governance Highlights Independence Board accountability and practices Shareholder Rights •11 of 12 directors are independent •All Board committee members are independent •Strong, engaged independent Lead Director with clearly defined duties that are publicly disclosed •Independent directors regularly meet without management present •Active Board refreshment •Majority voting in uncontested elections •All directors are elected annually •Policy against “overboarding” •Board oversight of Company strategy •Annual Board and committee self-evaluations •One class of stock; each shareholder gets one vote per share •Proxy access right with market terms •Extensive shareholder engagement •No poison pill •Shareholder right to call a special meeting •Active shareholder engagement program Board Of Directors PPG’s Board is actively engaged in developing our strategy and overseeing its execution, including major business and organizational initiatives, capital allocation priorities and potential business development opportunities.
Corporate Governance: board independence and shareholder rights · Filed 05/03/2026
We believe that having a Chairman and Chief Executive Officer with day-to-day oversight of Company operations, coupled with experienced independent directors who have appointed an independent Lead Director and four wholly-independent board committees, is the appropriate leadership structure for PPG at this time.
Corporate Governance: combined chair/CEO and independent oversight structure · Filed 05/03/2026
97.1 PPG Industries, Inc. Compensation Recovery Policy Adopted by the Board of Directors on July 20, 2023 was filed as Exhibit 97.1 to the Registrant’s Annual Report on Form 10-K for the period ended December 31, 2024.
Exhibit index: adopted compensation recovery policy · Filed 19/02/2026
